Samsung SDI Shares Surge on Growth Prospects.

July 07, 2023: Samsung SDI, a South Korean electric vehicle (EV) battery maker, witnessed a significant surge in its shares on Monday, fueling optimism for business growth. The stock price climbed 6.9% to 715,000 won ($543.19) during afternoon trade, outperforming the benchmark Kospi index’s 1.4% gain.

This rapid increase in Samsung SDI’s shares, the quickest since April 5, outpaced the gains of its major local competitors, SK Innovation and LG Energy Solution, which rose by up to 4.5% and 4.2%, respectively.

The rise in EV battery stocks contributed to the overall positive performance of the Kospi index on Monday. Over the weekend, government data indicated that the country had returned to a trade surplus in June after 15 consecutive months of deficits, mainly driven by robust vehicle exports, including electric vehicles eligible for tax breaks under the U.S. Inflation Reduction Act.

Economists, including ING senior economist Min Joo Kang, noted that global demand for EVs and batteries is expected to remain strong in the year’s second half. This positive outlook, combined with Samsung SDI’s technological edge and aggressive investment in the fast-growing U.S. battery market, has led Hi Investment & Securities analysts to suggest that the company’s shares deserve higher valuations than its competitors.

Furthermore, Samsung SDI CEO Choi Yoon-ho announced that the company plans to produce the world’s first prototype all-solid-state batteries in the second half of the year. These advanced batteries, known for their high energy density and safety, will be manufactured at Seoul’s company’s pilot factory.

Samsung SDI’s expansion efforts extend beyond solid-state batteries. The company previously revealed plans to invest at least $3 billion, in collaboration with General Motors, to construct an EV battery plant in Indiana. Additionally, Samsung SDI established a separate battery joint venture with Stellantis.

Actionable Takeaways:

1. Samsung SDI’s shares experienced a significant surge in expectations of business growth.
2. The stock outperformed its major local peers, SK Innovation and LG Energy Solution.
3. The rise in EV battery stocks contributed to the positive performance of the Kospi index.
4. Government data indicated a return to a trade surplus in South Korea, driven by strong vehicle exports.
5. Global demand for EVs and batteries is expected to remain robust in the year’s second half.
6. Samsung SDI’s technological edge and aggressive investment in the U.S. battery market position it favorably.
7. The company plans to produce the world’s first prototype all-solid-state batteries.
8. Samsung SDI has committed significant investments in EV battery plants and joint ventures.